Moody’s bullish on Philippine growth

Rating agency Moody’s has issued an upgrade appraisal for the Philippines on the back of the country’s strong economic fundamentals. The move signals that the country’s continued economic resilience and creditworthiness could merit an investment grade rating, placing well in the Ba1 to Baa2 ratings range.

The debt watcher moved its outlook for the Southeast Asian nation from “stable” to “positive” on December 19, noting that sustained improvements in the banking system could translate to more lending and thus stoke support for local consumption and investment.

The move came as no surprise to Philippine Finance Secretary Cesar V. Purisima, who noted that the markets already trade Philippines bond at two notches above investment grade.

“We are bullish about our future because with better governance, we will be able to realise the true potential of our people and our country,” BusinessWorld quoted him as saying. “The credit rating agencies are behind the curve in rating the Philippines.”

According to Moody’s analysis, improved economic strength was the main precursor for the credit rating upgrade.

Numerous other economic fundamentals continue to propel the Philippines as well.

“The [Philippine] stock market has grown 20 per cent on average over the past 1.5 years, which made it one of the fastest growing in the world,” Cristino L. Panlilio, Undersecretary of the Philippine Board of Investments, told Inside Investor in early October.

“Our financial sector has one of the lowest non-performing loan ratios in the world. On top of this, our international capital reserves have reached $79 billion. Perhaps most notably, our average annual GDP growth over the next decade will be between 6 and 7 per cent,” he added.

However, a caveat should be noted here that the IMF and World Bank have pegged growth at slightly lower rates.

Interest rates in the Philippines are now at historic lows, promoting private enterprises to seek out bank loans in greater volumes, buttressed by the country’s banks’ high liquidity.

Rating agency Moody’s has issued an upgrade appraisal for the Philippines on the back of the country’s strong economic fundamentals. The move signals that the country’s continued economic resilience and creditworthiness could merit an investment grade rating, placing well in the Ba1 to Baa2 ratings range. The debt watcher moved its outlook for the Southeast Asian nation from “stable” to “positive” on December 19, noting that sustained improvements in the banking system could translate to more lending and thus stoke support for local consumption and investment. The move came as no surprise to Philippine Finance Secretary Cesar V. Purisima, who...

Rating agency Moody’s has issued an upgrade appraisal for the Philippines on the back of the country’s strong economic fundamentals. The move signals that the country’s continued economic resilience and creditworthiness could merit an investment grade rating, placing well in the Ba1 to Baa2 ratings range.

The debt watcher moved its outlook for the Southeast Asian nation from “stable” to “positive” on December 19, noting that sustained improvements in the banking system could translate to more lending and thus stoke support for local consumption and investment.

The move came as no surprise to Philippine Finance Secretary Cesar V. Purisima, who noted that the markets already trade Philippines bond at two notches above investment grade.

“We are bullish about our future because with better governance, we will be able to realise the true potential of our people and our country,” BusinessWorld quoted him as saying. “The credit rating agencies are behind the curve in rating the Philippines.”

According to Moody’s analysis, improved economic strength was the main precursor for the credit rating upgrade.

Numerous other economic fundamentals continue to propel the Philippines as well.

“The [Philippine] stock market has grown 20 per cent on average over the past 1.5 years, which made it one of the fastest growing in the world,” Cristino L. Panlilio, Undersecretary of the Philippine Board of Investments, told Inside Investor in early October.

“Our financial sector has one of the lowest non-performing loan ratios in the world. On top of this, our international capital reserves have reached $79 billion. Perhaps most notably, our average annual GDP growth over the next decade will be between 6 and 7 per cent,” he added.

However, a caveat should be noted here that the IMF and World Bank have pegged growth at slightly lower rates.

Interest rates in the Philippines are now at historic lows, promoting private enterprises to seek out bank loans in greater volumes, buttressed by the country’s banks’ high liquidity.